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POLITICO 44

The recession that has caused immeasurable pain to American families has now lasted more than a year — the longest since the Great Depression. We’ve reached a pivotal moment, where the U.S. economy can either build on hopes of recovery and begin to grow once again or slide back into an even deeper contraction — one that could last years and have devastating effects.

This is not a time to sit by and wait for events to take their course in the hopes that the second scenario won’t occur. It can happen. And if it does happen, it is unclear whether any fiscal or monetary policies will get us out of it.

The emergency stimulus package that Congress passed in February is still being disbursed. But that is no reason to sit around and wait. This recession is much deeper, job losses more widespread and the danger of a prolonged downturn more real than we thought earlier this year. Then, unemployment was expected to peak at 8.5 percent. It is now 9.5 percent nationally and well over 10 percent in many parts of the country. Job losses actually increased from May to June.

The first stimulus will ultimately inject $787 billion into the economy, including $60 billion wisely invested in energy innovation.

At the same time, the recessionary pressures on the economy cannot be underestimated. More than $10 trillion in wealth was lost in U.S. stocks and real estate last year. According to Bureau of Labor Statistics estimates, 7.2 million Americans have lost their jobs since the recession began. The flow of credit to small businesses has slowed, impeding the entrepreneurial energy that is the key to growth and recovery.

The biggest threat right now is that unending job losses will trigger even more foreclosures and sap the confidence needed to revive consumer spending and investment.

Worse, without action, the budget shortfalls facing U.S. states will force them to sacrifice the very investments that will allow for long-term growth — investments in education, job retraining and clean-energy technologies. Forty-eight states are facing budget deficits for the current year. Combined, the shortfall represents a quarter of state budgets.

To be effective, a stimulus must be designed to have an immediate impact in creating jobs and helping states weather the current economic crisis. At the same time, it cannot add to our long-term debt.

Designing a fiscally responsible stimulus is also the key to building political support. Recent polls have shown that a majority of the American people oppose a second stimulus. Clearly, this is not because they believe the economy is doing well. They would want Congress to do something, but they simply don’t trust it to do the right thing. They recognize the need for bold action but do not want Congress to drown the next generation in debt.

With these principles in mind, here is what I hope to see included in a second stimulus:

The stimulus must provide immediate aid for states of $150 billion to meet the current budget shortfalls. But to ensure fiscal responsibility, this aid should come in the form of loans, not grants.

Readers' Comments (57)

Do we need infrastructure projects? Yes, but those should be funded at the state and local level using the money saved through reduction in the of the federal government. States don't need the money to pass through federal hands first.

Do we need infrastructure projects? Yes, but those should be funded at the state and local level using the money saved through reduction in the of the federal government. States don't need the money to pass through federal hands first.

Do we need infrastructure projects? Yes, but those should be funded at the state and local level using the money saved through reduction in the of the federal government. States don't need the money to pass through federal hands first.

The first rule of holes is 'When you find yourself in one, stop digging'.

It's astonishing how many people refuse to acknowledge that wisdom - especially when it is your money, your future, and your sacrifice - not theirs - that in question. Politicians have no problem squandering your resources to preserve their own positions, careers, and interests.

IF YOU PASS A SECOND STIMULUS ,Democratic Party has lost the next election in 2012......U.S. CONGRESS The first two STIMULUS didnt work ....Obama did put $20.00 dollars back in our pocket calling it a tax cut I can buy a loaf of bread and a gallon of milk with that. thanks for nothing!

PRESIDENT OBAMA AND THE DEMOCRATIC PARTY HAS LOST THERE MINDS! STOP THIS MADNESS NOW!

This is becoming a communist country and President Obama is headed for being a dictator if he does this minatory health care insurance reform plan...A penalty will be charged to people...Who is sitting in the white house? VOTE FOR CHANGE, WHAT A LIE! WE DONT WANT MINATORY HEALTH CARE INSURANCE REFORM PLAN.......NO ! NO! NO!NO! I DONT BUY IT NEVER! GO BACK TO THE TABLE IF YOU WANT MY VOTE IN 2012!

BANK OF AMERICA WANT LET ME REFINANCE MY HOUSE PAYMENTS BECAUSE OF A PMI INSURANCE HAVE NOT PAID DOWN 10% YET......WHAT A LOAD OF CRAP ANOTHER EXCUSE ONCE AGAIN! YAL CALL IT HELPING THE MIDDLE CLASS PEOPLE.....

The only logical conclusion is that Obama intends to create economic strife and hardship.

There are political advantages to be had from it you know. Obama might think he's able to manage the monster he's created, but that arrogance will undo him in the end - but not without great discomfort for our nation.

I don't want any more of my tax money disbursed by Pelosi to all of her pet projects that don't create jobs. Sorry, Mr. Ford, they had their chance and they blew it. We had to get a bill done in 48 hours or the economy would go off a cliff. Guess what? It created no jobs and the American people know it. Seven hundred billion down the drain.

We don't need (and can't afford) another stumulus bill. What Congress needs to do is immediately rescind the first stimulus bill, re-target the funding toward small businesses and individual tax cuts and get rid of porkulus items such as Pelosi's $16M habitat for mice. A second stimulus package would be nothing more than more of the same.

We don't need (and can't afford) another stumulus bill. What Congress needs to do is immediately rescind the first stimulus bill, re-target the funding toward small businesses and individual tax cuts and get rid of porkulus items such as Pelosi's $16M habitat for mice. A second stimulus package would be nothing more than more of the same.

So what is this little puke saying? That the other 'Stimulus' was STUPID? Does little Harold know that the 'STUPID STIMULUS' still has $700 BILLION left in it? Perhaps Harold should spend more time studying the FACTS, and less time reading the TALKING POINTS. Perhaps he can brush up on the numbers, while he's sitting in the waiting room, waiting for one of his many relatives to be escorted from their PRISON CELL, to the Visiting Area. What a Punk.

BANK OF AMERICA WANT LET ME REFINANCE MY HOUSE PAYMENTS BECAUSE OF A PMI INSURANCE HAVE NOT PAID DOWN 10% YET......WHAT A LOAD OF CRAP ANOTHER EXCUSE ONCE AGAIN! YAL CALL IT HELPING THE MIDDLE CLASS PEOPLE.....

VOTE FOR CHANGE, WHAT A LIE!!!!!!

sorry brother, you signed for the mortgage, we didn't...i have little sympathy for you.. you should have known what you were signing...just like when i was looking for a mortgage...the country wide guy tried to give me a $500K mortage knowing full good and well i couldn't make the monthly payments...

PMI insurance is there to protect the lender because your down payment was small or non-existent. you must have bought a house you can't afford. that is not the tax payers fault....

Congressman Ford was my representative in Congress. I've met him a couple of times, he is a nice young man but shows his economic ignorance and dedication to government solutions in this article.

To tell us that we must save the states with the first part of the stimulus shows he has no clue. Each state is responsible for and to itself. Those days are over.

Secondly, there is plenty of money in the 700+ stimulus to give all tax paying Americans tax relief for social security and witholding for a prolonged period. If the our politicians don't realize that Americans want spending cuts in all areas of government to go along with the stimulus, they are missing the point. Paying us off with the stimulus so they can continue the poor decision making they have given us for decades will not stand. We need cmprehensive change at every level. The silent group of americans are waking up and a tax cut or two won't placate or quiet us.

By the way, Harold, you told me the last time we met (10 years ago) that you were going to put me on your higher education committee and would be contacted by one of your staff members. I am still waiting.

But because Republicans only criticize and offer no alternatives of their own, I ignore them.

It's you Michel, who choose to ignore the alternatives. They are well known and have proven successful in the past. You know what they are - they just don't further your utopian control freak agenda, so you pretend they don't exist.

WE HAVE THE Rights, that among these are Life, Liberty and the pursuit of Happiness!

WE ARE NOT A HAPPY COUNTRY WITH OUR

GOVERNMENT AT THIS TIME.....NOTHING IS BEING DONE TO HELP THE PEOPLE JUST COSTING US MORE TAXES!

WE HAVE A DEBT THAT WILL NEVER BE PAID OFF IN OUR LIFE TIME !

EVERYBODY IN THE U.S. CONGRESS NEEDS TO READ WHY THEY ARE SITTING IN THESE CHAIRS.

WAS TO HELP THE PEOPLE! ! NOT HURT THE PEOPLE!!

I AM ASHAMED OF MY GOVERNMENT TODAY IN WASHINGTON DC

When in the Course of human events, it becomes necessary for one people to dissolve the political bands which have connected them with another, and to assume among the powers of the earth, the separate and equal station to which the Laws of Nature and of Nature's God entitle them, a decent respect to the opinions of mankind requires that they should declare the causes which impel them to the separation.

We hold these truths to be self-evident, that all men are created equal, that they are endowed by their Creator with certain unalienable Rights, that among these are Life, Liberty and the pursuit of Happiness.--That to secure these rights, Governments are instituted among Men, deriving their just powers from the consent of the governed, --That whenever any Form of Government becomes destructive of these ends, it is the Right of the People to alter or to abolish it, and to institute new Government, laying its foundation on such principles and organizing its powers in such form, as to them shall seem most likely to effect their Safety and Happiness.